Adani Carmichael Coal Mine ILUA assessment Coal mine in rural area December 2017
Economics Consulting Services Over 150 native title negotiations in. all Australian mainland States Negotiations cover 2004 to 2017
The first 100 projects Project Project Project Rio Tinto 7 Wedgetail gold Gellard phosphate claims BHP Billiton 4 Murchison Metals iron Mugarinya gold claims FMG 3 claims Ngarluma iron FMG Glacier Valley Hancock 4 claims Integra Mining iron Mugarinya rail Aquila/API 3 Saracen gold Jabiru copper claims Iluka Mildura Atlas Abydos iron Giralia iron ore Mount Gibson Iron Balfour Downs iron NW railway, port Jack Hills iron Telfer pipeline Brockman iron Balfour Downs Aurox iron Hazelwood tungsten Wilga coal Yalgoo SKA project CBH Sulphur Phanerozoic nickel Ellendale diamonds Springs Iluka mineral sands Phil s Creek iron Wiluna West iron Hancock iron Brockman Ravensthorpe tantalum Latji Latji regional Resources Radio Telescope Noongar single claim Alpha coal SKA Olympic Dam Jack Hills iron Challenger gold Ravensthorpe Atlas Pardoo iron Havilah gold nickel Vital Metals Atlas Snake Well gold IOH iron Prominent Hill Robertson Range iron Kimberley iron Spinifex Ridge Cairn Hill iron ore Sandfire copper Beta Nutrition Wilcherry Hill Fairstar iron Dongara sands Arrium iron Windimurra Sirius nickel Karara magnetite vanadium OPR rail and port Perilya Zinc Oakajee Port /Rail Moly Metals iron Yannarie Straits Torrens copper Silver Lake gold Baldivis Quarry Red Hill iron Weld Range iron Kintyre uranium Griffin coal NQLC gold Telfer gold Flinders iron Toro uranium Magellan lead Onslow marble Montezuma Audax vanadium marblemleresources Banjima iron Karlawinda gold
Carmichael Mine rail - port Up to 60 million tonnes a year over 60 years 6 open cut pits, 5 underground mines 380km to new port at Abbot Point Railway capacity starts at 40 million tonnes a year Estimated full project cost $21.7 billion Raising the capital has been difficult
Financial Analysis The financial analysis in this presentation is based on: Acil Allen study of January 2015 Supported Land and Environment Court case Phase 1 only Acil Allen comment 2017 larger project lacks detailed cost information
Acil Allen evaluation Phase 1 January 2015 Coal 30mt a year for 30 years Financial averages per year over 34 years Price - $86/t Revenue - $2,574m Capex $242m ($8.24 billion total) Operating costs $419m Net - $1,913m after royalties before Tax 30% Internal rate of return Phase 1 appears to be a very profitable project
Phase 2 Phase 2 is a much larger project than phase 1 But Acil Allen stated in 2017 that there does not appear to be sufficient detailed costs that allow a proper evaluation of the 60mt a year project This presentation assumes Phase 1 only 30 years at 30 mt a year
ILUA Cash Benefits 1. ILUA signed $550,000 2. ILUA registered - $750,000 3. Surrender of Native Title up to $398,750 4. First coal - $400,000 5. Annual coal payment -$510,000 6. Value 30 years up to $17.4 million
ILUA Jobs Job-readiness training - $1.0 million W&J Training coordinator - $1.0 million (first 10 years) 50 jobs (optimistic) over 30 years up to $112.5m Total value - up to $114.5 million
ILUA Business & Contracts Initial contract value Bus Service 50 jobs Cultural heritage and walkers 30 casual Environment and land 20 casual Value of Environmental Management Contract not included as jobs counted Estimated value up to $21.75m
ILUA Benefits 30 years 1. Cash up to $17.4 million 2. Jobs up to $114.5 million 3. Business up to $21.75 million 4. Total value - up to $154 million 5. Gross 30 year revenue (Acil) - $77,400m 6. W&J share 0.2%
ILUA Benchmarks 1. W&J share 0.2% 2. Industry benchmarks 0.35% to 0.75% - mid point 0.5% 3. Queensland more like 0.35% 4. 0.35% would be a package of $270 million 1.75 times the ILUA package
Benefits This is not a well balanced package. 75% of the benefits are delivered as jobs if these do not materialise, the benefits will be dramatically lower
Evaluation 1. This is a comprehensive package of benefits with cash payments, jobs and business opportunities 2. The total value is heavily dependant on the jobs and contracts components 3. Jobs and contract targets have not been delivered in most jurisdictions and agreements 4. Given the outlook for coal mining is unlikely to exceed 30 years 5. The total value if it lasts 30 years is still well below industry benchmark standards 6. The benefits will be larger if the project runs for 60 years but the W&J share of the project revenue will not increase 7. 60 years is very unlikely